I've been thinking a lot the last couple of days about UberX -- that's the ride-sharing service where you use your smartphone to summon a ride from a regular driver in his personal car, for less money than a taxi -- not to mention Spotify, Airbnb, Facebook,. In other words, all the things out there that save us money by devaluing or possibly eliminating the middle-class job that used to provide them. If you want to get fancy, call it "the sharing economy."
Here's the ironic reason that I've been pondering this. Sunday night, I was here at the Daily News for my usual weekend editing shift, i.e., editing the stories turned in by our staff of amazing reporters. But as news filtered out about a dramatic undercover sting by the Philadelphia Parking Authority that impounded the cars of five UberX drivers, because PPA insists the service is illegal, there were zero reporters available. Our staff has shrunk dramatically over the last decade -- mainly because fewer people buy a newspaper (and see its ads) while more people find news for free on the Web. And one of the reporters who normally works on Sunday was out on an unpaid furlough, another cost-cutting move. So I was lone editor and reporter here in the heart of America's fifth biggest city, writing the damn Uber story myself. I found myself covering "the sharing economy" of transportation -- thanks to the "sharing economy" of news.
In 2014, we don't even give a second thought to the services that we used to pay other people to provide. I can't remember the last time I used a travel agent or even had to deal with an airline reservation agent, thanks to Travelocity, Expedia, etc. -- and most likely you can't either. Of course, in the near future, some of the hotels that you might have booked on Travelocity will be gone, as more and more people use Airbnb, the UberX of accommodations, to stay in somebody's spare guest room instead of the Holiday Inn Express down the street. Journalists like me whine a lot (see previous paragraph) about job losses in the newsroom, but I feel equally as bad about the rows of classified-ad takers down the hallway that have disappeared, thanks to free advertising on Craigslist.
As a music buff, though, nothing is more heartbreaking than what the new economy has done to what used to be known as the record industry. It was a blow to professional musicians when most fans switched from buying complete CDs to individual songs purchased through iTunes, a recent era that most bands now like to think of as "the good old days." Most everyone I know listens to music primarily on web-based free streaming services (supported by either occasional ads or a low-priced monthly subscription) that pay artists pennies, such as Spotify or Pandora. Ha, pennies...I was kidding -- actually Spotify pays artists, on average, between $0.006 and $0.0084, per song. So it adds up. Glacially. Wrote the great David Byrne, former lead singer of Talking Heads:
Musicians might, for now, challenge the major labels and get a fairer deal than 15% of a pittance, but it seems to me that the whole model is unsustainable as a means of supporting creative work of any kind. Not just music. The inevitable result would seem to be that the internet will suck the creative content out of the whole world until nothing is left. Writers, for example, can't rely on making money from live performances – what are they supposed to do? Write ad copy?
Is it any wonder that U2, one of the greatest bands (OK, arguably) of the last 35 years, sold its soul -- and it's last batch of songs (for want of a better term) to promote a giant corporation, Apple. Presubaly they got a little more than $0.0084 from Tim Cook and Co. -- the only way in 2014 they'd make anywhere near what they pulled down for The Joshua Tree (ask your dad, or a WXPN listener, what that was).
So what, right? The "sharing economy" is an inevitable stage of progress for capitalism, creating new efficiencies -- such as making money off that empty room when your mother-in-law's not visiting. The conventional taxi drivers now under assault from UberX exist because all the horse-and-buggy drivers were put out of business a century ago. Travel agents barely survive, but someone's making good money programming computers for Orbitz. And all of us are saving money as consumers in the process. Right?
No -- something has changed. Scale, for one thing. Simply put, 21st Century technology is so good it's not creating jobs at the rate it's destroying them. Most famously, as writer Jason Lanier pointed out, now-bankrupt Kodak once employed 140,000 people at its peak, while the photo-sharing site Instagram employed 13. Yes, that's an extreme case, but you get the idea. (Newspapers and magazines have shed tens of thousands of jobs as many people are now getting news through Facebook, which employs 8,348, give or take.)
The result is a downward spiral. Wages have been stagnant in America for more than a generation. People jump on the sharing economy bandwagon not just because they can, but also because they have to. It makes me sad, but I know that personally -- in a two-paycut household, with two kids on college at the same time -- I haven't bought any recorded music, even on iTunes, in at least a year. It would be kind of cruel telling one child to drop out so I can download the new Foxygen, so the choice is to stare quietly at the lights of West Philly from a speeding El or listen to Spotify -- and you can guess which I choose. But this all creates a downward spiral. Putting less money into the economy means fewer wages and more layoffs, which only pressures people to find new ways to share. I wonder how many UberX drivers and Airbnb hosts are laid off journalists or travel agents, trying to survive. Just today, a business writer wonders how to measure the gross national product as actual spending disappears -- thanks to services like Uber.
The middle class worker is getting squeezed at both ends. It's an oft-told story how everyday folk are hammered from on high, how bosses have used outsourcing and -- with help from their bought-and-paid-for politician pals -- crushed labor's bargaining power, to create a world of astronomical CEO pay and income inequality that benefits them and a small investor class. But what's happening with this "sharing economy" is the other side of the vice now pressuring the middle class. A healthy economy is supposed to grow in a "virtuous cycle."
I don't know what to call this downward spiral. It sure ain't virtuous.
This is a failure of our political and economic systems. I think most people would agree that few things are more essential to a sense of self-worth, security and fulfillment than a decent job. But there's really nothing in 21st Century that offers any incentive whatsoever to create employment. All power flows to the politically-connected bosses and shareholders, or to consumers looking to save a buck. Middle-class employees have zero leverage to save their jobs, their pension or their benefits. Yet this is the bulk of the American citizenry. It's an economic and political scenario hell-bent on destruction.
There's no simple solution, but there are steps to start restoring the equilibrium. Politically, the first move is a higher minimum wage, which recognizes that the fast-food workers of the 21st Century are the coal miners of the 20th Century, and that a society that forces so many gainfully employed people onto food stamps is unsustainable. Likewise, and some of this is up to working men and women ourselves, workers have to find new ways to stick together and strengthen collective bargaining, which was responsible for so much of the prosperity of the middle 20thj Century. And government can worry less about finding new tax breaks for the 1 Percent and invest more in programs like infrastructure, than not only mean construction jobs but will boost other employers who can better move the goods they produce or sell or new or imporved highways or rail lines.